Tata Consumer shares fall after company denies report suggesting talks to pick at least 51% in Haldirams

Tata Consumer Products shares succumbed to selling pressure in early deals on Thursday, giving up much of the gains registered in the final hours of the previous session, after the Tata group company denied reports suggesting it was in talks to buy a significant stake in popular snack maker Haldiram's. The stock of Tata Consumer Products declined by Rs 26.1, or three per cent, to Rs 853.9 apiece on BSE, having finished Wednesday's session four per cent stronger at Rs 879.9 apiece. 

On Wednesday, news agency Reuters reported, citing two people briefed on the matter, that Tata Consumer Products was in talks to buy at least 51 per cent of Haldiram's but was not comfortable with the $10 billion valuation sought. 

Later in the day, Tata Consumer Products said the company was "not in negotiations as reported" in the Reuters report, and added that it is "not aware of any information that has not been announced to the exchanges, which requires disclosures".

"There is no impact of this article on the Company. We would like to add that the Company evaluates various strategic opportunities for growth and expansion of the business of the Company, on an ongoing basis. The Company will make appropriate announcements in compliance with the obligations under SEBI (LODR) Regulations, 2015, as and when any such requirement arises," Tata Consumer Products further said. 

Nomura maintained a 'buy' rating on Tata Consumer Products with a price target of Rs 875 apiece. The brokerage's target implies a 0.6 per cent discount to the previous close.  

ALSO READ: Why it may be difficult for any company to buy out Haldiram's

Tata Consumer Products results

Tata Consumer Products—whose popular brands include Tata Salt, Tata Coffee, Sampann, and Tetley—began the financial year 2023-24 with a steady performance in the first quarter. 

In July, the company reported a 22 per cent year-on-year increase in consolidated net profit to Rs 338 crore for the quarter ended June 30. Its revenue grew 12 per cent to Rs 3,741 crore for the three-month period, according to a regulatory filing. Its margin—a key measure of profitability—improved by 90 basis points to 14.6 per cent compared with the year-ago period.

The company met analysts' estimates on all parameters. According to Zee Business research, Tata Consumer Products' quarterly net profit was estimated at Rs 323 crore, revenue at Rs 3,731 crore, and margin at 14.3 per cent. 

Tata Consumer Products shares

Tata Consumer shares have risen about 12.5 per cent so far in 2023, outperforming an eight per cent gain in the headline Nifty index.

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